- Organic capex budget of $15 billion; affiliate capex budget
of $2 billion
- Restructuring and other charges expected to be $1.1 to $1.5
billion in 4Q24
Chevron Corporation today announced an organic capital
expenditure range of $14.5 to $15.5 billion for consolidated
subsidiaries (capex) and an affiliate capital expenditure
(affiliate capex) range of $1.7 to $2.0 billion for 2025.
The company’s 2025 capex and affiliate capex budgets represent a
$2 billion year-over-year reduction. "The 2025 capital budget along
with our announced structural cost reductions demonstrate our
commitment to cost and capital discipline," said Chevron Chairman
and CEO Mike Wirth. "We continue to invest in high-return,
lower-carbon projects that position the company to deliver free
cash flow growth."
Capex
Upstream spending is expected to be about $13 billion, of which
roughly two-thirds is allocated to develop Chevron’s U.S.
portfolio. Permian Basin spend is lower than the 2024 budget and
anticipated to be between $4.5 and $5.0 billion as production
growth is reduced in favor of free cash flow. The remaining U.S.
investment is split between the DJ Basin and the Gulf of Mexico,
where deepwater growth projects continue to ramp and are expected
to deliver offshore production of 300 mboed in 2026. In
International, about $1.0 billion is allocated to Australia, which
include Gorgon backfill investments.
Downstream capex is expected to be approximately $1.2 billion,
with two-thirds allocated to the U.S. Within total upstream and
downstream budgets, about $1.5 billion of capex is dedicated to
lowering the carbon intensity of our operations and growing New
Energies businesses. Corporate and other capex is expected to be
around $0.7 billion.
Affiliate Capex
Tengizchevroil LLP’s budget is less than half of the affiliate
capex as the Future Growth Project is projected to achieve first
oil in the first half of 2025. The remaining affiliate spend
primarily supports Chevron Phillips Chemical Company LLC, which
includes the Golden Triangle Polymers and Ras Laffan Petrochemical
Projects.
4Q24 Interim Update
In connection with recently announced plans to achieve $2 to $3
billion in structural cost reductions by the end of 2026, the
Company expects to recognize a restructuring charge of $0.7 to $0.9
billion after-tax in the fourth quarter, with associated cash
outflows over the next two years. The Company also anticipates
recognizing non-cash, after-tax charges related to impairments,
asset sales, and other obligations of $0.4 to $0.6 billion in the
fourth quarter. The Company expects to treat these as special items
and exclude them from adjusted earnings. It is possible that the
financial impact of these items may differ from the estimates
provided, including differences due to final accounting
determinations, changes in facts, circumstances or assumptions or
other developments in the interim.
Chevron is one of the world’s leading integrated energy
companies. We believe affordable, reliable and ever-cleaner energy
is essential to enabling human progress. Chevron produces crude oil
and natural gas; manufactures transportation fuels, lubricants,
petrochemicals and additives; and develops technologies that
enhance our business and the industry. We aim to grow our oil and
gas business, lower the carbon intensity of our operations and grow
lower carbon businesses in renewable fuels, carbon capture and
offsets, hydrogen and other emerging technologies. More information
about Chevron is available at www.chevron.com.
NOTICE
As used in this news release, the term “Chevron” and such terms
as “the company,” “the corporation,” “our,” “we,” “us” and “its”
may refer to Chevron Corporation, one or more of its consolidated
subsidiaries, or to all of them taken as a whole. All of these
terms are used for convenience only and are not intended as a
precise description of any of the separate companies, each of which
manages its own affairs. Structural cost reductions describe
decreases in operating expenses from operational efficiencies,
divestments, and other cost saving measures that are expected to be
sustainable compared with 2024 levels.
Please visit Chevron’s website and Investor Relations page at
www.chevron.com and www.chevron.com/ investors, LinkedIn:
www.linkedin.com/company/chevron, X: @Chevron, Facebook:
www.facebook.com/ chevron, and Instagram:
www.instagram.com/chevron, where Chevron often discloses important
information about the company, its business, and its results of
operations.
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This news release contains forward-looking statements relating
to Chevron’s operations and lower carbon strategy that are based on
management’s current expectations, estimates, and projections about
the petroleum, chemicals, and other energy-related industries.
Words or phrases such as “anticipates,” “expects,” “intends,”
“plans,” “targets,” “advances,” “commits,” “drives,” “aims,”
“forecasts,” “projects,” “believes,” “approaches,” “seeks,”
“schedules,” “estimates,” “positions,” “pursues,” “progress,”
“may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,”
“trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,”
“strategies,” “opportunities,” “poised,” “potential,” “ambitions,”
“aspires” and similar expressions, and variations or negatives of
these words, are intended to identify such forward-looking
statements, but not all forward-looking statements include such
words. These statements are not guarantees of future performance
and are subject to numerous risks, uncertainties and other factors,
many of which are beyond the company’s control and are difficult to
predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such
forward-looking statements. The reader should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this report. Unless legally required, Chevron
undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Among the important factors that could cause actual results to
differ materially from those in the forward-looking statements are:
changing crude oil and natural gas prices and demand for the
company’s products, and production curtailments due to market
conditions; crude oil production quotas or other actions that might
be imposed by the Organization of Petroleum Exporting Countries and
other producing countries; technological advancements; changes to
government policies in the countries in which the company operates;
public health crises, such as pandemics and epidemics, and any
related government policies and actions; disruptions in the
company’s global supply chain, including supply chain constraints
and escalation of the cost of goods and services; changing
economic, regulatory and political environments in the various
countries in which the company operates; general domestic and
international economic, market and political conditions, including
the military conflict between Russia and Ukraine, the conflict in
Israel and the global response to these hostilities; changing
refining, marketing and chemicals margins; the company’s ability to
realize anticipated cost savings and efficiencies associated with
enterprise structural cost reduction initiatives; the potential for
gains and losses from asset dispositions or impairments; the
possibility that future charges related to enterprise structural
cost reduction initiatives, impairments and other obligations may
be greater or different than anticipated, including as a result of
unexpected or changed facts, circumstances and assumptions; actions
of competitors or regulators; timing of exploration expenses;
timing of crude oil liftings; the competitiveness of
alternate-energy sources or product substitutes; development of
large carbon capture and offset markets; the results of operations
and financial condition of the company’s suppliers, vendors,
partners and equity affiliates; the inability or failure of the
company’s joint-venture partners to fund their share of operations
and development activities; the potential failure to achieve
expected net production from existing and future crude oil and
natural gas development projects; potential delays in the
development, construction or start-up of planned projects; the
potential disruption or interruption of the company’s operations
due to war, accidents, political events, civil unrest, severe
weather, cyber threats, terrorist acts, or other natural or human
causes beyond the company’s control; the potential liability for
remedial actions or assessments under existing or future
environmental regulations and litigation; significant operational,
investment or product changes undertaken or required by existing or
future environmental statutes and regulations, including
international agreements and national or regional legislation and
regulatory measures related to greenhouse gas emissions and climate
change; the potential liability resulting from pending or future
litigation; the risk that regulatory approvals and clearances
related to the Hess Corporation (Hess) transaction are not obtained
or are obtained subject to conditions that are not anticipated by
the company and Hess; potential delays in consummating the Hess
transaction, including as a result of the ongoing arbitration
proceedings regarding preemptive rights in the Stabroek Block joint
operating agreement; risks that such ongoing arbitration is not
satisfactorily resolved and the potential transaction fails to be
consummated; uncertainties as to whether the potential transaction,
if consummated, will achieve its anticipated economic benefits,
including as a result of risks associated with third party
contracts containing material consent, anti-assignment, transfer or
other provisions that may be related to the potential transaction
that are not waived or otherwise satisfactorily resolved; the
company’s ability to integrate Hess’ operations in a successful
manner and in the expected time period; the possibility that any of
the anticipated benefits and projected synergies of the potential
transaction will not be realized or will not be realized within the
expected time period; the company’s future acquisitions or
dispositions of assets or shares or the delay or failure of such
transactions to close based on required closing conditions;
government mandated sales, divestitures, recapitalizations, taxes
and tax audits, tariffs, sanctions, changes in fiscal terms or
restrictions on scope of company operations; foreign currency
movements compared with the U.S. dollar; higher inflation and
related impacts; material reductions in corporate liquidity and
access to debt markets; changes to the company’s capital allocation
strategies; the effects of changed accounting rules under generally
accepted accounting principles promulgated by rule-setting bodies;
the company’s ability to identify and mitigate the risks and
hazards inherent in operating in the global energy industry; and
the factors set forth under the heading “Risk Factors” on pages 20
through 26 of the company’s 2023 Annual Report on Form 10-K and in
subsequent filings with the U.S. Securities and Exchange
Commission. Other unpredictable or unknown factors not discussed in
this report could also have material adverse effects on
forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20241205712836/en/
Randy Stuart -- +1 713-283-8609
Chevron (NYSE:CVX)
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